Alexander v. United States Department of Housing & Urban Development

Background

These consolidated cases involve tenants who lived in federally related apartment projects that HUD acquired after the projects’ sponsors defaulted on federally insured mortgages. In Indianapolis, residents of Riverhouse Tower were given written notices to leave after HUD foreclosed and then closed the deteriorated complex. In Washington, D.C., 72 families at Sky Tower were ordered to vacate after HUD acquired the partially rehabilitated property and later planned demolition and resale of the land. HUD refused relocation benefits and lower courts reached opposite results before the cases reached the Court.

Reasoning

The Court interpreted the Relocation Act’s definition of “displaced person,” focusing on the written-order clause. It held that clause applies only when (1) the written order to vacate results directly from an actual or proposed acquisition of property and (2) that acquisition was made to further a federal program or project. The Court found that routine HUD foreclosure acquisitions caused by loan defaults were not acquisitions “for” a federal program in the required sense, and that later management or demolition plans do not retroactively make the original acquisition qualify.

Real world impact

As applied here, the Court affirmed the Seventh Circuit’s denial of benefits to the Riverhouse tenants and reversed the D.C. Circuit’s decision for Sky Tower tenants, making those displaced by ordinary HUD foreclosure acquisitions ineligible under the Relocation Act. The opinion notes Congress could change coverage, so eligibility might change only if lawmakers amend the statute.